Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Monday, June 14, 1999 Published at 13:59 GMT 14:59 UK


Business: The Economy

Japan acts to stem rise of yen

The Bank of Japan wants the right conditions for economic recovery

The US dollar shot up against the yen on Monday when Japan's central bank bought up dollars to slow a rise in the Japanese currency.

A stronger yen is a threat to the exporters that power Japan's economy because it makes their goods more expensive overseas, which could be dangerous to their economy as it is still recovering.


[ image: A weak yen helps Japanese exporters]
A weak yen helps Japanese exporters
Dealers say the Bank of Japan could have bought as much as 5bn worth of US dollars on Monday.

The dollar, which dipped below 118 yen in early Asian trade, was forced higher to above 120 yen by repeated intervention.

Eisuke Sakakibara, Japan's vice finance minister for international affairs, confirmed that the Bank of Japan had stepped into foreign exchange markets to stem the rising yen but declined to confirm at what level.

He said: "We will continue to monitor moves on foreign exchange markets and take appropriate measures if necessary."

Protecting fragile economy

Peter Morgan, Chief Economist, HSBC Securities Japan said: "Well I think the key point is that the Japanese economy is not as strong as the numbers suggest.

"I mean 8% is certainly not the underlying growth rate at this point.

"I think it's basically flat at best. So that in those sorts of conditions a significant yen appreciation is going to have a negative impact and would tend to prevent the recovery from taking hold.

"So I think it's probably a good thing to try and keep the yen from going up too much."

Nikkei down

The yen has been rising against the dollar since the government announced last week that Japan's gross domestic product grew a robust 1.9% in the first quarter of the year.

In stock trading, the benchmark Nikkei stock index edged down 9.73 points to close on Monday at 17,188.82 after a late bout of profit taking.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

11 Jun 99 | The Economy
Job boost for Japan

10 Jun 99 | The Economy
Japan's economy grows again

15 Mar 99 | The Economy
Record trade surplus in Japan

08 Jan 99 | The Economy
The rise of the yen





Internet Links


Bank of Japan

Japanese Ministry of Finance


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree